Mumbai: Large claims of around Rs 600 crore from the insured refineries at Mahul, Kochi, Bina and Numaligarh have nearly doubled the insurance premium for Bharat Petroleum Corporation Ltd (BPCL) even while its insured assets have remained the same for 2019-20.
According to a source, a fire at the state-run oil marketer’s Mahul refinery in Mumbai has resulted in one of the largest insurance claims so far last year of around Rs 450 crore. The Bina, Madhya Pradesh, refinery had a fire claim of Rs 60-70 crore while the Kochi, Kerala, refinery made a claim of Rs 12-15 crore. As a result, the premium on renewal of the property insurance cover this year for BPCL has nearly doubled to around Rs 131 crore. In 2018-19, the premium was Rs 70 crore.
According to insurance industry sources, BPCL insurance policy is a Mega Policy/Large Risk policy covering all its refineries against business interruption, physical damage, where the policy would replace the assets in case of damage, and also pay for loss of profit if the refinery is shut down for any reason.
The deductible/excess under loss of profit cover due to business interruption this year has increased to 45 days from 30 days in the last policy.
The policy has a loss limit of Rs 14,000 crore on its total assets, which are insured for Rs 1.7 lakh crore and the sum insured has remained the same this year too.
The insurance cover has been underwritten by public sector non-life insurance companies. New India Assurance is the lead insurer while the co-insurers are Oriental Insurance, United India Insurance and National Insurance. Private insurer ICICI Lombard General Insurance has also taken a small share of 2.5 per cent in the risk. The state-owned GIC Re is the lead reinsurance company, with the remaining risk has been reinsured in the international market.
In August 2018, in a statement to the stock exchanges, BPCL had said that a leak was observed in the reactor effluent air fin cooler section of the hydrocracker unit of the Mahul refinery at 2.50pm on August 8 and the resultant fire was put out at 2.10 am on August 9.